Procurement and remuneration of ancillary services in competitive environments: the example of Argentina and proposals for California [electricity supply]

The unbundling of ancillary services is a requirement of competitive electricity markets. Generators and other agents must receive the appropriate remuneration for them, and customers must pay the associated charges or even have the opportunity for self provision. In a competitive environment, it seems appropriate to apply market-based procedures to this aspect of electricity supply as well. This paper analyzes the provision and payment of ancillary services in the Argentinian electricity system, a well-known example of a pool-based competitive generation market, and describes some innovative proposals for the market-based procurement of these services in California.